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26/09/2016

Airbus says Brexit would pose ‘huge’ risks

UK & Europe

Airbus says Brexit would pose ‘huge’ risks

The A-380 is the world's largest airliner.

[Airbus.com]

European aerospace giant Airbus has weighed into a debate about Britain’s future in Europe, warning of job losses and “huge” economic risks if the country votes to leave the European Union in a referendum to be held by 2017.

A decision to quit the EU would raise doubts about Airbus’s long-term future investments in the country, the company’s top UK representative said, although the time needed to transfer manufacturing skills meant it could not easily shift its current operations. Airbus employs 16,000 people in the UK.

“I don’t believe that there is anyone who has run a global business who can truly, and clearly, argue that there will be greater value and economic benefit outside of the EU, as opposed to in it,” Paul Kahn, president of Airbus Group UK, said in a speech to Welsh business leaders on Wednesday (20 May).

Airbus, the world’s second-largest planemaker after Boeing, makes wings for all its passenger jets at a 2 billion-pound factory in Broughton, in north Wales. It get 6 billion pounds of revenues a year in the UK as a whole.

The warning came as Britain’s largest business lobby group urged bosses to defend membership of the European Union by telling voters it is the best guarantee of prosperity.

>> Read: Business lobby tells British CEOs to ‘come out for the EU’

Vodafone’s chief executive has said the UK ought to remain a member. On the other hand, JCB Chief Executive Graeme MacDonald says it would not make much difference in trade with the rest of Europe.

Airbus is one of the first industrial companies to speak out in favour of EU membership since this month’s UK election, which saw Prime Minister David Cameron’s Conservatives win a majority.

Cameron has pledged to renegotiate Britain’s ties with Europe and then give voters a referendum on whether to leave the EU by the end of 2017.

Airbus’s Kahn said the long-term economic risks of a potential British exit were “huge”.

“In Wales alone, some 150-200,000 jobs could be directly impacted if Britain were to leave,” he said, according to a text of his remarks issued by Airbus.

“If after an exit from the European Union, economic conditions in Britain were less favourable for business than in other parts of Europe, or beyond; would Airbus reconsider future investment in the United Kingdom? Yes, absolutely”.

He told the Welsh audience other European nations wanted to “steal our lunch” in aerospace. He did not name specific countries, but industry experts say Germany and Spain – two other partners in Airbus, along with France – have long coveted wings manufacturing because it can generate highly skilled jobs.

Kahn said the long lead times needed to build up the skills to support advanced manufacturing meant that jobs would be slow to leave. But they could be “even slower to return” should companies choose to send their future investment elsewhere.

Background

David Cameron's ruling Conservative party won an outright majority in the 2015 parliamentary election, allowing them to govern alone.

Cameron has promised to renegotiate the country's relationship with the EU and then call a referendum by 2017 on whether to stay or leave, a decision with far-reaching implications for trade, investment and Britain's place in the world.

>> Read: Brexit referendum looms after Tory election victory

The Tory government may use the momentum from its win to bring the vote forward to 2016, avoiding clashes with French and German national elections due in Spring 2017.

The British premier has previously said he would be “delighted” if renegotiation of the terms of UK membership could be agreed quickly and the vote brought forward.